wordpress blog stats
Connect with us

Hi, what are you looking for?

Zomato acknowledges emerging duopoly in food delivery as unit economics improve

"While FY19 saw hyper-competition between four well-funded food delivery players, FY20 ended with a two player market structure," Zomato CEO and co-founder Deepinder Goyal said in a mid-COVID-19 performance report published by the company on Friday. Like app-based cab booking, app-based food delivery is indeed a duopoly now — Zomato and Swiggy remain the only players in the market, with Uber Eats having been sold off to Zomato and Ola significantly scaling Foodpanda back. While Goyal admitted in the report that the COVID-19 pandemic hurt the company, he maintained that it remains on its path to be profitable. [caption id="attachment_218272" align="aligncenter" width="800"] Source: Zomato[/caption] "We expect to make a complete recovery in the coming 3-6 months while continuing to maintain tight control on costs/profitability," Goyal said, arguing that the business is healthier because of COVID too (laying off 13% of the workforce may have played a part there, something Goyal didn't mention). He said that young people moving to their parents' homes meant that delivery demand didn't go back to pre-COVID levels immediately, but that this would happen within 3–6 months. Improved unit economics: As customers warm to food delivery more, Zomato is making more money per order (since restaurants pay percentage of order value). The company is also reducing subsidies and discounts to users gradually, which has led to a sharp increase in the company's margins. "In Q1 FY20, we used to make a contribution margin of –₹47 per order; in Q1 FY21, we made contribution margin of +₹27 per…

Please subscribe/login to read the full story.
Written By

I cover the digital content ecosystem and telecom for MediaNama.

Free Reads

News

Speaking to Medianama, founders of the concerned companies alleged Google was the one not in compliance with the Indian competition regulator's antitrust order.

News

According to reports, farmers have also informed that their phones are being put on surveillance, and that they are being notified by the police...

News

Under the updated regulatory framework, sandbox entities must process all the data, in its possession or under its control, in accordance with the provisions...

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

NPCI CEO Dilip Asbe recently said that what is not written in regulations is a no-go for fintech entities. But following this advice could...

News

Notably, Indus Appstore will allow app developers to use third-party billing systems for in-app billing without having to pay any commission to Indus, a...

News

The existing commission-based model, which companies like Uber and Ola have used for a long time and still stick to, has received criticism from...

News

Factors like Indus not charging developers any commission for in-app payments and antitrust orders issued by India's competition regulator against Google could contribute to...

News

Is open-sourcing of AI, and the use cases that come with it, a good starting point to discuss the responsibility and liability of AI?...

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ